Condo market sees higher prices, lower inventory during third quarter

Wayne Braverman
Link Boston Homes
Many people consider condos at the Ritz-Carlton in Midtown to be the epitome of luxury living in Boston, from the iconic brand name to the world-class service the staff provides. Unit 37F sold on April 16 for $2,900,000.

Boston’s real estate market continued to be a hot commodity during the third quarter. The high demand that appeared in the first quarter that went into overdrive in the second quarter remained robust during the period from July through September, according to LINK.

According to Miller Samuel Inc., which just released its report on the state of the real estate market in Boston for Douglas Elliman, “Sales rose sharply year over year for the third straight quarter to the second highest level in three years.”

LINK reports that there were 1,232 homes sold in the neighborhoods it covers during the third quarter. That’s up 34 percent from the same time last year when only 920 homes changed hands. It’s also better than the 977 sold during the third quarter in pre-pandemic 2019. Still, that number is down from the second quarter of this year when 1,387 homes closed. The first quarter of this year’s data revealed only 777 homes sold.

One of the biggest factors in shaping the market was a shortage of homes available to buy this summer.

According to Miller Samuel Inc., “Listing inventory fell sharply as bidding wars continued to be commonplace in the market." 

Inventory did increase to a 2021 high of 229 units for sale entering the third quarter in July. However, heading into late August, homes available decreased to only 170 condos available – the lowest level since COVID-19 first appeared and the fewest listed in more than eight years, according to Miller Samuel Inc. The number recovered during the second half of the quarter, reaching 223 as September came to a close, but that’s still way down from previous years.

Homes available appear to follow the concerns of the Delta variant surge across the country, including in Massachusetts.

And the hardy buying competition that occurred in the past statewide was not as great in many Boston neighborhoods. During the third quarter, only 3 percent of the sales were above the asking price. The high for this year was 6 percent and that was in the beginning of the second quarter when people felt a lot more optimistic with three vaccines available to hopefully keep people safe from COVID. There was no Delta surge at that time.

Notwithstanding, the vigorous competition with extreme bidding for units available has been on the decline in Boston since the second quarter of 2017 when an incredible 48 percent of sales went for higher than the asking price. Economic concerns cooled off the market after that and COVID-19 pushed the competition down to the low points that are now the case in the Boston market.

The high point of sales above the asking price during the past two years was 17 percent late in the second quarter of last year when the state’s COVID shutdown started to be lifted and the rate of infections headed down for a while.

And of course, lower inventory means higher prices for available units. LINK reports that home prices are at a 10-year high.

The average selling price in the neighborhoods covered by LINK mounted 4 percent from a year ago to $1,152,857 and the median held at $785,000. Most of the neighborhoods saw prices climb except for the Back Bay, Charlestown, the North End, South End and West End. The number of sales ascended everywhere except in Charlestown and the South End, thanks to the lack of homes to buy.

The biggest sales gains happened in East Boston, Fenway, Midtown and the Back Bay.

The average and median price per square foot ticked up 2 percent from last year’s third quarter to $986 average and $909 median.

The average days on the market for a home in Boston went from 69 a year ago to 83 today.

Luxury condos

With 61 floors, One Dalton is Boston’s tallest residential building. Residents enjoy luxury condos and a wide array of appealing amenities.

The luxury category celebrated a giant hike in the second quarter with sales up 382 percent to 294 sold as compared to the same time last year. However, sales fell in the third quarter to 166 units sold. Nevertheless, that is 77 percent higher than it was a year ago.

The average selling price for the high-end homes slid 12 percent to $2,389,817 and the median dipped 3 percent to $1,697,000. Both the average and median price per square foot skipped down 7 percent to $1,534 for the average and $1,420 for the median.

The average days on the market continues to taper off. Homes stayed 130 days in the second quarter and it is now 115 days.

The luxe category includes the full-service buildings such as the InterContinental, Four Seasons, Ritz, Rowes Wharf, One Dalton, The Lucas, Pierce Boston, The Lyndon, The Whitwell, 50 Liberty, Lovejoy Wharf, Millennium Tower and 180 Beacon. These places typically include valet parking and concierge service along with lifestyle amenities such as social clubs, theaters, gyms and pools. Some even include an array of special events.

Here is the breakdown of overall sales per neighborhood covered by LINK and Boston Homes:

Back Bay

Residents at the Mandarin love the five-star services and amenities that combine New England elegance with refined Oriental touches that create a distinctive hospitality experience.

The third quarter recognized a rise in sales in the Back Bay as compared to the same time in 2020. This time, 126 homes sold – that’s up a whopping 52 percent from last year. Be that as it may, that’s three fewer units than what sold in the second quarter this year.

The average selling price is a city-high $2,312,533. The median arose 15 percent to $1,350,000 – second highest in Boston.

The average price per square foot is currently $1,398 – second highest in the city. The median PSF is $1,204.

The average time for a home to stay on the market grew from 97 days in the second quarter to 126 days this time around. For this past three months, 3 percent of the homes sold went for above the asking price.

The homes on the market numbers witnessed a lot of bouncing around, starting the quarter at 60, dropping to 31 in August, and closing at 46.

Beacon Hill

The top sale on Beacon Hill was Unit 5A70 at 70-72 Mt. Vernon St. This luxurious penthouse was recently renovated by FH Perry based on a design by SV Design. Spanning two buildings, it offers 4,300 square feet on a single level with access from two elevators. It sold on July 15 for $9,800,000.

Sales on Beacon Hill trickled down from 67 in the second quarter to 60 in the July through September period. It’s still a 28 percent improvement than a year ago.

The average selling price climbed 21 percent from last year to $1,353,565 while the median edged up 2 percent to $867,500.

The average price per square foot is $1,174 and the median is $1,142.

Beacon Hill is still one of the most desirable neighborhoods in the city.

Homes on Beacon Hill sold in the third fastest time in Boston, going in 67 days. There are never enough homes for sale to satisfy demand here. The quarter ended with 19 homes on the market and 4 percent of the sales were above asking price.

Charlestown

Sales in Charlestown went down 29 percent from last year with 93 units sold this quarter. In the second quarter, 136 homes got new owners.

The average selling price stuck at $809,297 while the median toppled 6 percent to $705,000. The price per square foot is the second lowest in the neighborhoods covered by LINK, now standing at $774. The median PSF is $784.

Charlestown sells homes faster than any other neighborhood in the city, lasting on the market an average of only 49 days. Demand is still high here with 10 percent of the sales going for more than the asking price.

Inventory during the summer steadily surged with 27 homes available at the end of the quarter.

Demand for homes in this neighborhood is still much higher than inventory. This data suggests that Charlestown is a highly sought-after and desirable place where people want to raise their kids.

East Boston

With new developments and a lot of interest from prospective buyers, East Boston is among the city’s trendiest neighborhoods this year. A neighborhood record was set during the quarter with 259 homes sold  an 18 percent increase from the previous record set in the second quarter of last year. That’s also 250 percent loftier than last year at this time.

Eastie also noticed record sales volume at $183,606,691 – a 14 percent hike from the old mark set during this year’s second quarter.

The average selling price shot up 29 percent to $708,906 while the median spiked up 19 percent to $643,000, which is the lowest median price in the LINK coverage area.

The average price per square foot soared 41 percent to $795 and the median PSF sprang 27 percent to $739.

Home stayed on the market an average of 82 days. The quarter ended with 11 units available.

This neighborhood has grown a lot in popularity for those buying homes. East Boston, which at one time was a place home-shoppers pretty much ignored, is now very much in demand. People can buy very nice homes in this neighborhood at a lower price than in places such as Back Bay, Beacon Hill and the South End.

Fenway 

A home at Pierce Boston could be convenient and appealing to the professionals flocking to the Fenway. And it’s not just for the museums, colleges and Red Sox games, Pierce Boston is the perfect place to live.

The Fenway watched the city’s second largest leap in sales, upswinging an incredible 67 percent to 50 homes enjoying new owners during the past three months of this year. The average selling price had a 2 percent rise to $733,311 and the median leapt 16 percent to $643,500.

The average price per square foot dwindled 3 percent, falling to $981 and the median held steady at $976.

Homes here stayed on the market an average of only 63 days. Inventory is low with the fourth quarter opening with only two units available.

Midtown

The Sudbury Condominiums at Bulfinch Crossing is a boutique hi-rise in the heart of downtown Boston with 55 new luxury residences. Unit 4702 sold on Sept. 30 for $5,600,000.

Midtown also had an impressive quarter with sales burgeoning to 52 percent from the same time last year to 44 homes sold. The average selling price jumped up 20 percent to $1,664,625 from last year’s third quarter. The median selling price went up 8 percent to $1,165,000.

The average price per square foot glided up 14 percent to $1,161 and the median realized a 11 percent step up to $1,088. Homes stayed on the market an average of 341 days.

Inventory strengthened during the quarter, closing with 13 homes available.

North End

The popular North End sales tick up 7 percent from a year ago with 30 sold. That’s a lot more than the 18 that sold in the first quarter this year.

The average selling price dipped 4 percent from last year’s third quarter to $683,183. That’s a big drop from this year’s second quarter when the average was $817,561.

The median descended 5 percent from last year to $599,500.

The price per square foot is steady at $955 and the median PSF is $978.

Units in the North End lasted only 67 days on the market – among the fastest turn-around in Boston. This is one of the city’s most popular neighborhoods with demand typically higher than availability.

Usually there were only four homes on the market at a time in the quarter and 7 percent of them sold above the asking price.

Seaport

There were 68 condos sold in Seaport during the third quarter, up 21 percent from the same time last year. It’s also surpassed the 57 sold in the first quarter of this year.

The average sales price zipped up 23 percent to $2,175,082 – the second highest in the city. The median scaled 14 percent to $1,689,500 – the highest in Boston.

The price per square foot skirted up 2 percent to $1,559 and the median PSF is now 4 percent higher at $1,593. Both are Boston’s premier prices.

The average time on the market is 142 days. Inventory started the quarter with seven homes available and closed with 12 units ready for new owners.

South Boston

Unit 402 at the Arya Condominiums, 2 West 6th St. in South Boston, sold for $2,625,000. The  
spectacular gourmet kitchen includes sleek white lacquer cabinets, a large Sub-Zero fridge and an expansive island.

Southie continues to be a hot spot for those seeking new homes. As the city’s top seller, 261 homes were sold in the third quarter – an incredible 23 percent increase from the same time last year. Yet it is less than the 292 sold during this year’s second quarter.

The average selling price zoomed up 11 percent to $828,852 while the median went up 8 percent to $780,000.

The average PSF is now at $797 and the median is $792.

Homes in South Boston generally don’t stay on the market for long – demand is heavy in this very family-friendly neighborhood. The average time to sell a home here was 71 days. Going into October, there were 18 homes looking for new owners.

South End

201 West Brookline St. in the South End is one of nine units converted from the historic Concord Baptist Church building. PH-402 sold on Sept. 1 for $6,300,000.

The South End continues to be very popular among home buyers. Sales went down 5 percent to 174 sold. That’s lower than the 261 sold in the second quarter. Main reason – not enough inventory. At one point during the quarter, only 35 homes were available. It rocketed to 52 at the end of September. With 6 percent of the homes selling for higher than the asking price, competition is hotter here than in most other parts of the city.

The average selling price shrank 7 percent to $1,206,599 and the median tumbled 10 percent to $949,800.

The average price per square foot dropped 2 percent at $1,060 and the median PSF fell a percent to $1,068.

This neighborhood had the third highest number of sales in the city. Homes here stayed on the market an average of 67 days.

Waterfront

Waterfront home sales spiraled upwards 41 percent to 52 sold. The average selling price bumped up 24 percent to $1,425,760 while the median vaulted 17 percent to $1,069,500.

The average price per square foot is now $1,002 and the median is $913.

Homes here stayed on the market an average of 79 days.

The Waterfront reached its highest sales volume ever, escalating to $74,139,500, which is a percent higher than the old record set in the second quarter of 2018.

The quarter ended with 18 homes available.

West End

The West End saw sales fly up 50 percent to 15 units sold for the quarter. The average selling price descended 4 percent to $675,160 – the most affordable among the LINK neighborhoods. The median is also the lowest, falling 3 percent to $655,000.

The average PSF ($727) and median PSF ($685) are the lowest in the neighborhoods covered by LINK. Nonetheless, finding homes to buy here is challenging. There was only one home available heading into the fourth quarter. Homes here sell in an average of 62 days

Coming up soon: The top third quarter sales by neighborhood.